MTAT.03.231
Business Process Management
Lecture 1 – Introduction
Marlon Dumas
marlon.dumas ät ut . ee
1
About this course
Objective
• To introduce the discipline of modeling, analyzing,
automating and monitoring business processes.
Related courses
• Enterprise System Integration – Integrating applications
to automate or support business processes
• Software Economics – Economic assessment of IT
projects
• Data mining – Mining business process execution logs
2
Structure of the course
14 lecture+practice sessions covering:
•
•
•
•
•
Process Modeling
Process Analysis
Process Redesign
Process Automation
Process Monitoring & Mining
Team Project
3
Grading
Six assignments (25 points in total)
• 8-12 hours per homework ≈ 60 hours in total
Project (25 points)
• ≈ 40 hours
Exam (50 points), free choice between:
• Technical exam: Modelling, Analysis, Redesign, Mining
• Business exam: Modelling, Automation, Mining
4
Readings and resources
• Course material posted on course Web page
• http://courses.cs.ut.ee/2015/bpm
• Textbook
• Dumas, La Rosa, Mendling & Reijers: Fundamentals of Business
Process Management, Springer 2013
• You can download chapters or whole book if inside the university
network (see “Readings” section of web site)
• Use message board for questions
6
Issue
delivery
receipt
Prepare
shipment
Load
truck
Schedule
payment
Package
products
Schedule
delivery
Issue
invoice
Check &
confirm
PO
Unload
truck
Notify
shipment
Check
Invoice
Request
PO change
Match
incoming
payment
Obtain
PO
confirm.
7
Serve
meal
Load
dishwasher
Bring
menu
Collect
laundry
Brush
grills
Collect
payment
Take
order
Unload
dishwasher
Collect
laundry
Present
bill
Sweep
& mop
Clean
kitchen
surfaces
Greet &
seat
8
Business processes
Assets &
Partners
Organisation
Function A
Function B
Function C
Financial
Human
Resources
Business Process
Business Process
Customers
Technology
Business Process
Materials
9
PO
received
Check &
confirm
PO
Package
products
Load
truck
Notify
shipment
Issue
invoice
Match
payment
Payment
made
PO
issued
Obtain
PO
confirm.
Schedule
delivery
Unload
truck
Issue
delivery
receipt
Check
invoice
Schedule
payment
Goods
arrived
10
Customer
arrived
Greet &
seat
Take
order
Bring
menu
Serve
meal
Present
bill
Issue
invoice
Customer
paid
Kitchen
is dirty
Load
dishwasher
Clean
kitchen
surfaces
Brush
grills
Collect
laundry
Sweep
& mop
Unload
dishwasher
Kitchen
is clean
11
A business process is…
a chain of events, activities and decisions
...involving a number of actors and objects,
….triggered by a need
and leading to an outcome that is of value to a customer.
Examples:
• Order-to-Cash
• Procure-to-Pay (aka Purchase-to-Pay)
• Application-to-Approval
• Fault-to-Resolution
12
“My washing machine doesn’t work…”
Negativeoutcomes
outcomes(value-creating):
(value-reducing):
Positive
not repaired
a timely
manner
• Fault repaired
withinminor
intervention
customer
pays more than expected
• Fault repaired
repaired,but
covered
by warranty
Call Centre
Insurance
Company
Technician
Customer
Customer
fault-to-resolution process
Parts
Store
VALUE
Service
Dispatch
Centre
13
Your turn
• Think of an organization and a process in this organization:
•
•
•
•
•
Is it order-to-cash, procure-to-pay, fault-to-resolution…
Who is/are the customer(s)?
What value does this process deliver to its customer?
Who are the key actors of the process?
List at least 3 outcomes of the process.
14
15
Managing Performance (Rummler’s Framework)
Business Environment
Economy
Regulatory
Organisation
Human
Resources
Technology
Materials
Performance Planning
Function A
Performance Management
Function B
Function C
Business Process
Business Process
Stakeholders
Value
Assets &
Resources
Financial
Culture
Customers
Business Process
Competitors
16
Process performance
If you had to choose between two services, you would
typically choose the one that is:
• F…
• C…
• B…
Process performance
If you had to choose between two services, you would
typically choose the one that is:
• Faster
• Cheaper
• Better
Process performance
Three dimensions of process performance
• Time
• Cost
• Quality
Improving business process performance
Customer
arrived
Greet &
seat
Take
order
Bring
menu
Serve
meal
Present
bill
Issue
invoice
Customer
paid
20
How would you improve this process?
Outsource to Customer
Standardize
Eliminate Cooking
Automate
Invest and Build
Re-sequence
Eliminate Waiters
21
Business Process Management (BPM)
Body of principles, methods and tools to design, analyze,
execute and monitor business processes, with the aim of
improving their performance.
IT systems
Customers
Employees
Business
Processes
Trading
Partners
Data
IT infrastructure
Suppliers
22
Why BPM?
“The first rule of any technology used in a business
is that automation applied to an efficient operation
will magnify the efficiency.
The second is that automation applied to an
inefficient operation will magnify the inefficiency.”
Bill Gates
23
In other words…
Information
Technology
Yields
Business
Value
Enables
Yields
Process
Change
Index Group (1982)
24
Why BPM
25
26
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
insights
performance insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
To-be
To-be process
process
model
model
Process
redesign
27
Process architecture
Australian water supplier example
Management
processes
Core
processes
Support
processes
28
Process portfolio
Australian retailer example
Primary focus
High
F
D
E
T
G
C
I
A
K
H
B
W
N
P
J
Y
Z
U
M
V
X
R
Q
L
Low
O
Poor
0
Good
Process Health
4
29
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
insights
performance insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
To-be
To-be process
process
model
model
Process
redesign
30
Business process model
Invoice handling example
Finance ERP
Department
Invoice
Invoice
received
Enter
Invoice
Details
Report
Check
Invoice
Mismatches
Invoice DB
Invoice
no
Post Invoice
mismatches
Invoice
posted
Invoice
Senior Finance Officer
mismatch
exists
Block
Invoice
Invoice
blocked
31
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
insights
performance insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
To-be
To-be process
process
model
model
Process
redesign
32
Qualitative process analysis
Root-cause analysis example
33
Quantitative process analysis
Process simulation example
34
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
insights
performance insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
To-be
To-be process
process
model
model
Process
redesign
35
Process redesign
TO-BE process model
AS-IS process model
Cost
Time
Flexibility
Quality
36
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
performance insights
insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
impact
their impact
To-be
To-be process
process
model
model
Process
redesign
37
Process implementation
Process
automation
Process change
management
Executable
process design
Job redesign
Configuration
& coding
Training
Performance
Testing
management
plan
...
….
38
The BPM lifecycle
Process
identification
Process
Process architecture
architecture
Conformance
Conformance and
and
performance
insights
performance insights
Process
discovery
As-is
As-is process
process
model
model
Process
monitoring and
controlling
Process
analysis
Executable
Executable
process
process
model
model
Process
implementation
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
To-be
To-be process
process
model
model
Process
redesign
39
Process monitoring & controlling
Dashboards, alerts & reports
Event
stream
Model-based analytics (p. mining)
DB logs
40
Roles in the BPM lifecycle
BPM group
Process
identification
Process
Process architecture
architecture
Process
discovery
Conformance
Conformance and
and
performance
performance insights
insights
Process
System
administrator monitoring and
controlling
Executable
Executable
process
process
model
model
Developer
As-is
As-is process
process
model
model
Process
owner
Process
analysis
Process
participants
Process
implementation
To-be
To-be process
process
model
model
Analyst
Insights
Insights on
on
weaknesses
weaknesses and
and
their
their impact
impact
Process
redesign
41
Course structure
Process
identification
Process
discovery
Weeks 11-14
Process
monitoring and
controlling
Weeks 8-10
Process
implementation
Weeks 2-3
Process
analysis
Week 6:
Lecture 12
Process
redesign
Weeks 4-5
Weeks 6-7
42
Next Week
Introduction to Process Modeling
43